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Michigan judge drops two charges against Chesapeake

A Michigan judge on Wednesday dismissed two of the three charges against Oklahoma City-based Chesapeake Energy Corp. over claims that the company conspired with Canadian oil company Encana Corp. to hold down lease prices in the state.

A Michigan judge on Wednesday dismissed two of the three charges against Oklahoma City-based Chesapeake Energy Corp. over claims that the company conspired with Canadian oil company Encana Corp. to hold down lease prices in the state.

District Judge Maria I. Barton dropped both charges that executives conspired against a Michigan landowner. The judge, however, said there is enough evidence to proceed to trial on claims that the companies conspired to rig a bid in an auction for leases from the state.

“We appreciate that the court carefully reviewed the evidence and dismissed two of the three counts,” Chesapeake spokesman Gordon Pennoyer said in a statement Wednesday. “We will continue to contest the remaining count, which we also believe has no merit.”

Chesapeake and Encana were charged March 4 with two misdemeanor counts of antitrust violations. The more serious charge carries up to a $1 million fine for corporations.

Chesapeake has said it and Encana had considered a joint venture, but decided against it. Chesapeake also has argued that lease prices and competition for leases dropped because it became clear the Michigan geology was not as good as the companies had hoped.

Prosecutors claim executives from the two companies conspired in a series of emails to divide up oil and gas leases in Michigan, according to the charges. The emails, made public in 2012 by Reuters, included discussions between the companies’ executives about an arrangement to split up Michigan counties so that each company would be an exclusive bidder for public and private leases.

Chesapeake, however, has said the full email conversations in context make it clear there was no collusion.

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by Adam Wilmoth

Energy Editor

Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....